1. Warm-up: The Great Depression section 2
February 13th, 2014
Warm-up: The Great Depression section 2
*Relate Hoover’s election in 1928 to voters’ expectations of continuing prosperity
*Explain why the government and many Americans believed that business prosperity
was in the national interest
*Analyze the increase of personal debt in the 1920s as an economic indicator
Binder check
Notes: 16.1-The Economy in the Late 1920s
16.1 quiz and guided reading: gr just cross off
Homework: Finish work listed above

2. Economy in the Late 1920’s
Name: ______________

3. Good Mood The mood of Americans in the 1920s was optimistic
What does optimistic mean?
Why the smile?
Medical advances
Reduced the death from whooping cough, diptheria, and other diseases
Infant mortality rate decline, life expectancy increased 10 years! (54 years)
Economy
Herbert Hoover: “Poverty will be banished from this nation!”
Optimism: Concern:

4. Presidential Election
Who won the presidential election in 1928?
Why was it easy for Republicans to win the election?
Look on page 476, find out why people trusted Hoover and believed the good time would be even better (2 reasons)

5. Great economy 1925: 27 billion value of stocks 1928: 38.4 billion
Have money-can it actually buy anything?
REAL WAGES-what money could actually buy
Unemployment was 4%
Optimism: Concern:

6. Obsessed with the Economy
High confidence in business
Trusted the advice of business leaders
They encouraged EVERYONE to invest in the stock market! (yikes!)
Even the presidents
Equated the interests of the nation with the interests of the business world
Hoover did nothing to discourage borrowing money to buy stocks

7. Welfare Capitalism Labor unions decreasing in membership
Why? Standard of living seemed to improve
Companies started meeting the needs of the union
WELFARE CAPITALISM: industrial policy of meeting workers’ needs with increased pay and benefits for the purpose of preventing labor union organization
Example” raised wages, cut hours, paid vacations, even English classes for the immigrants
Optimism: Concern:

8. Uneven Riches Economy seriously out of balance!
Rich were getting richer
Ex: 0.1% of the population held over 34% of the money
Other 99.9% had to split the remaining 66%!
80% of American households had no savings
Huge corporations dominated
Ex: 200 companies controlled 49% of the American Industry
Optimism: Concern:

9. No Money 
Many Americans in debt…but still wanted to enjoy the new lifestyle and buy the new fun products! Whatever shall they do?
Many people continued to buy goods they couldn’t afford (radio, vacuum cleaner, refrigerator)
Why? Advertising made the good irresistible
No money? Who care! Installment buy!
Installment buying-people pay for expensive items over many months in smaller payments
Optimism: Concern:

10. $$ Get rich quick $$ Stocks aren't just for the wealthy anymore!
Speculation: taking a chance on the stock market
Cant afford it? Hey, buy on margin!
Buy on margin: buy stocks at a fraction of the price, borrow the rest
Idea: make money and just pay it off with your profits!
Optimism: Concern:
Stocks are 5$, you want to buy 100 stocks-how much will you need?
You only have 100$, how much will you need to borrow?
Success! Stock prices rose to 10$! How much NET profit did you make?

11. Too much stuff! Too many goods were being produced!
Wages rose, but not as fast as production
Industries began to slow down
Automobile industry slumped in 1925, so did steel, rubber, and glass
Housing construction fell by 27% between 1928 and 1929
Optimism: Concern:

12. Hard Times Farmers never experienced the ‘Roaring 20s’
European farmers began to recover from the war and their products were not in as high of demand
Crop prices fell so low could not repay the loans for land and machinery
Coal mines and textile mills were working in bad conditions (dangerous, low wages, long hours)
Optimism: Concern:

13. List
Optimism
Concern